The global market for switches and routers remains firmly dominated by a single vendor, according to the latest analysis from Synergy Research.
Cisco commands roughly 51% of the overall market. Its dominance is especially pronounced in enterprise routers, where it holds about 63% share. Cisco also controls more than half of the Ethernet switching market and about 38% of the service provider router market.
Huawei is Cisco’s principal competitor across these segments. Other rivals vary by category: HPE and Arista compete primarily in Ethernet switching; Technicolor and Juniper challenge Cisco in enterprise routers; and Nokia and Juniper are key competitors in service provider routers. Across the market as a whole, Juniper ranks third behind Huawei, with Nokia and HPE filling out the top five. Arista and H3C join a longer list of challenger vendors that make up the market’s “long tail.”
Revenues for global switching and routing equipment exceeded $11 billion in the third quarter of the year, and totaled roughly $44 billion over the last four quarters. That represents about 3% growth on a rolling annual basis. But does this growth signal a stable market or the beginning of a decline?
Synergy Research’s current view is that the market remains stable. While emerging technologies such as software-defined networking (SDN) and network function virtualization (NFV) are disruptive and change how networks are built and operated, they have not yet fundamentally altered the competitive landscape for major hardware suppliers. “These are genuine issues which erode growth opportunities for networking hardware vendors, but there are few signs that they are substantially impacting Cisco’s competitive market position in the short term,” said John Dinsdale, chief analyst at Synergy Research.
“The big picture is that total switching and router revenues are still growing and Cisco continues to control half of the market,” Dinsdale added.
Industry forecasts point to rapid adoption of virtualized and software-driven network functions. ABI Research, for example, projects the NFV market could reach $38 billion by 2022, showing strong momentum for NFV and SDN. At Mobile World Congress, Steve Gleave, senior vice president of marketing at Metaswitch Networks, told this correspondent that the industry’s momentum for NFV deployments was clearly evident.
Disruption from SDN and NFV appears likely in time, but for the moment Cisco remains in a comfortable leading position as the market transitions. Network hardware vendors will need to adapt to increasing virtualization and software-led architectures, yet current market data indicate that traditional switching and routing revenue streams continue to grow while Cisco retains a commanding market share.